<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
                              ---------------------
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
             ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

                         Commission File Number 0-26876

                            OAK HILL FINANCIAL, INC.
             (Exact name of registrant as specified in its charter)
--------------------------------------------------------------------------------

                  OHIO                                           31-1010517
    (State or other jurisdiction of                           (I.R.S. Employer
     incorporation or organization)                          Identification No.)

          14621 STATE ROUTE 93
             JACKSON, OHIO                                          45640
(Address of principal executive offices)                         (Zip Code)

       Registrant's telephone number, including area code: (740) 286-3283

                               -------------------
           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      None
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                         Common stock, without par value

          Check whether the registrant (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
past 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes  X   No
                  ---     ---

          Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-K is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]

          The aggregate market value of the voting stock held by non-affiliates
of the Registrant computed by reference to the sales price of the last trade of
such stock was $46,811,678.50 on March 16, 1999.

          There were 4,367,765 shares of Registrant's Common Stock outstanding
on March 16, 1999.

                       DOCUMENTS INCORPORATED BY REFERENCE

          Portions of the Registrant's Annual Report to Stockholders for the
year ended December 31, 1998 are incorporated by reference into Part II and Part
IV.

          Portions of the proxy statement dated April 2, 1999 for the Annual
Meeting of Stockholders to be held April 27, 1999 are incorporated by reference
into Part III.
<PAGE>   2
<TABLE>
                                                TABLE OF CONTENTS
<CAPTION>
                                                                                                            Page
                                                                                                            ----
<S>       <C>                                                                                               <C>
                                                        PART I

Item 1.   Business                                                                                            3

Item 2.   Properties                                                                                         17

Item 3.   Legal Proceedings                                                                                  18

Item 4.   Submission of Matters to a Vote of Security Holders                                                18

                                                        PART II

Item 5.    Market for Registrant's Common Equity and Related Stockholder Matters                             18

Item 6.   Selected Financial Data                                                                            20

Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations              22

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk                                         30

Item 8.   Financial Statements and Supplementary Data                                                        30

Item 9.   Changes in and Disagreements With Accountants on Accounting and Financial Disclosure               30

                                                       PART III

Item 10.  Directors and Executive Officers of the Registrant                                                 30

Item 11.  Executive Compensation                                                                             30

Item 12.  Security Ownership of Certain Beneficial Owners and Management                                     31

Item 13.  Certain Relationships and Related Transactions                                                     31

                                                        PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K                                    31

Signatures
</TABLE>

                                      - 2 -
<PAGE>   3
                                     PART I

ITEM 1.   BUSINESS.

Oak Hill Financial, Inc.
------------------------

          Oak Hill Financial, Inc., an Ohio corporation (the "Company"), is a
bank holding company that engages indirectly in the business of commercial
banking, and other permissible activities closely related to banking and
consumer finance lending, through two wholly owned subsidiaries, Oak Hill Banks
(the "Bank") and Action Finance Company ("Action"). The Company provides
management and similar services for the Bank and Action. Since it does not
itself conduct any operating businesses, the Company must depend largely upon
its subsidiaries for funds with which to pay the expenses of its operation and,
to the extent applicable, any dividends on its outstanding shares of stock. For
further information see Note A of the Notes to Consolidated Financial Statements
appearing in the Company's Annual Report to Stockholders, which is incorporated
by reference in response to this item.

          The Company was formed in 1981 for the purpose of becoming the parent
holding company of the Bank. The Company is registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended. As such, the Company is
subject to strict regulation regarding the acquisition of additional financial
institutions and the conduct, through subsidiaries, of non -banking activities
(see "Regulation").

          The Company faces strong competition from both banking and non-banking
institutions. Its banking competitors include local and regional banks and bank
holding companies, as well as some of the largest banking organizations in the
United States. In addition, other types of financial institutions, such as
savings and loan associations and credit unions, also offer a wide range of loan
and deposit services that are directly competitive with those offered by the
Bank. The consumer is also served by brokerage firms and mutual funds that
provide checking services, credit cards, and other services similar to those
offered by the Bank. Major stores compete for loans by offering credit cards and
retail installment contracts. It is anticipated that competition from non-bank
and non-savings and loan organizations will continue to grow.

          The range of banking services provided by the Company's subsidiary to
their customers includes commercial lending, real estate lending, consumer
credit, credit card, and other personal loan financing. The Bank operates under
the direction of a board of directors and officers that is separate from the
Company.

          The Company acquired Unity Savings Bank, a savings bank chartered
under the law of Ohio and headquartered in McArthur, Ohio, ("Unity"), on October
2, 1997. The total consideration paid by the Company for all the outstanding
common stock of Unity was approximately $12.7 million based upon the issuance of
804,612 shares of the Company common stock. The acquisition of Unity by the
Company was completed through the merger of Unity with and into the Bank with
the Bank being the surviving corporation. The acquisition of Unity was accounted
for as a pooling of interests.

          In 1998, the Company formed a consumer finance company, Action Finance
Company. It operates two offices in Jackson County and at year end, had $1.93
million in assets, with net outstanding loans of $1.64 million.

          On March 11, 1999, the Company and Towne Financial Corp., a
corporation chartered under the laws of Ohio, entered into an Agreement and Plan
of Merger, pursuant to which Towne will be merged with and into the Company. The
Company will exchange 4.125 shares for each share of Towne stock. Towne has
222,100 shares of common stock outstanding. Based one the average of the
Company's closing bid and asked price of $19.22, the transaction would valued at
approximately $17.6 million. The merger will be accounted for as a pooling of
interest, and is subject to shareholder approval, regulatory approval and other
customary conditions to closing. In connection with the transaction and the
accounting requirements of a pooling of interest, the Company's share repurchase
plan was indefinitely suspended.

                                     - 3 -
<PAGE>   4
Lending Activities
------------------

          GENERAL. The Company generally makes loans in the 9 counties in which
its branches are located. The Company's principal lending activities are the
origination of (i) conventional one- to four-family residential loans, and (ii)
commercial loans, most of which are secured by real estate located in the
Company's primary market area. These loan categories accounted for approximately
82% of the Company's loan portfolio at December 31, 1998. The Company also makes
consumer loans, including installment loans and second mortgages, and offers
credit cards.

          LOAN PORTFOLIO COMPOSITION AND ACTIVITY. The following table sets
forth the composition of the Company's loan portfolio in dollar amounts and in
percentages for each of the last three years, along with a reconciliation to
loans receivable, net.

<TABLE>
<CAPTION>
                                                                           AT DECEMBER 31,
                                ----------------------------------------------------------------------------------------------------
                                      1998                 1997                 1996                 1995                 1994
                                ----------------     ----------------     ----------------     ----------------     ----------------
                                AMOUNT   PERCENT     AMOUNT   PERCENT     AMOUNT   PERCENT     AMOUNT   PERCENT     AMOUNT   PERCENT
                                ------   -------     ------   -------     ------   -------     ------   -------     ------   -------
                                                                       (DOLLARS IN THOUSANDS)
<S>                            <C>       <C>        <C>       <C>        <C>       <C>        <C>       <C>        <C>       <C>
Type of loan:

  1-4 family residential
    loans                      $125,301    36.8%    $115,647    40.5%    $100,433    42.3%    $ 84,784    42.4%    $ 69,993    39.3%

  Commercial and other loans    154,650    45.4      123,978    43.5       96,214    40.5       72,863    36.4       76,024    42.7

  Consumer loans                 63,653    18.7       48,008    16.8       42,845    18.0       43,968    21.9       33,426    18.8

  Credit cards                    1,405     0.4        1,360     0.5        1,111     0.5          958     0.5          788     0.4
                               --------   -----     --------   -----     --------   -----     --------   -----     --------   -----

Total loans                     345,009   101.3      288,993   101.3      240,603   101.3      202,573   101.2      180,231   101.2

LESS:

  Allowance for loan losses      (4,316)   (1.3)      (3,744)   (1.3)      (2,934)   (1.3)      (2,367)   (1.2)      (2,186)   (1.2)
                               --------   -----     --------   -----     --------   -----     --------   -----     --------   -----

TOTAL LOANS RECEIVABLE, NET    $340,693   100.0%    $285,249   100.0%    $237,669   100.0%    $200,206   100.0%    $178,045   100.0%
                               ========   =====     ========   =====     ========   =====     ========   =====     ========   =====
</TABLE>

          The following is maturity information with respect to commercial loans
at December 31, 1998.

<TABLE>
<CAPTION>
                           AFTER ONE YEAR       AFTER FIVE YEARS
 LESS THAN ONE YEAR      THROUGH FIVE YEARS     THROUGH TEN YEARS       AFTER TEN YEARS
 ------------------      ------------------     -----------------      -----------------
           WEIGHTED               WEIGHTED               WEIGHTED               WEIGHTED
            AVERAGE                AVERAGE                AVERAGE                AVERAGE
   AMOUNT    YIELD        AMOUNT    YIELD        AMOUNT    YIELD        AMOUNT    YIELD         TOTAL
   ------    -----        ------    -----        ------    -----        ------    -----         -----
                                         (DOLLARS IN THOUSANDS)
<S>        <C>           <C>      <C>           <C>      <C>           <C>      <C>            <C>
  $29,022    9.16%       $39,206    8.67%       $25,162    8.85%       $61,260    8.67%        $154,650
</TABLE>

          LOANS SECURED BY ONE- TO FOUR-FAMILY REAL ESTATE. A significant
portion of the Company's lending activity is the origination of permanent
conventional loans secured by one- to four-family residences located within the
Company's primary market area. The Company typically makes adjustable rate
mortgage loans and holds the loans in portfolio. More than 63% of the Company's
portfolio of permanent conventional mortgage loans secured by

                                     - 4 -
<PAGE>   5
one- to four-family residences are adjustable rate. The Company also underwrites
fixed rate, residential mortgage loans, and may sell those loans in the
secondary market to the FHLMC or on a servicing-released basis to another
financial institution.

          The Company makes fixed rate loans on one- to four-family residences
up to 95% of the value of the real estate and improvements (the "loan-to-value"
or "LTV") substantially all of which are sold in the secondary market.
Residential real estate loans are offered by the Company for terms of up to 30
years. The Company requires private mortgage insurance for the amount of such
loans in excess of 80% of the value of the real estate securing such loans.

          The aggregate amount of the Company's one-to-four-family residential
real estate loans equaled approximately $125.3 million at December 31, 1998 and
represented 36.8 % of loans at such date. At such date, loans secured by
residential real estate with outstanding balances of approximately $482,000, or
 .4%, of its total one- to four-family residential real estate loan balance, were
more than 90 days delinquent or nonaccruing.

          COMMERCIAL LOANS. The Company is also active in commercial lending,
primarily to smaller businesses in the Company's primary market area. These
loans are typically secured by commercial real estate and priced in relation to
the prime rate. Such loans generally have terms of up to 15 years and
loan-to-value ratios of up to 75%. To a much lesser degree, the Company will
also make unsecured commercial loans, which are also typically priced at spreads
to prime and have maturities of up to one year.

          Loan officers review the financial statements, appraisals of the
collateral, and other related documents before recommending funding of a
commercial loan. The loan officer and the approving officer or committee then
determines that there is sufficient income to cover this and other loan
payments, that the collateral is of adequate liquidation value, that the
applicant has a good payment history and is capable of performing the
requirements of the loan. Other reviews and analysis are done as appropriate,
depending upon the complexity of the credit request.

          Although a risk of nonpayment exists with respect to all loans,
certain specific types of risks are associated with different types of loans.
The primary risks associated with commercial loans are the quality of the
borrower's management and the impact of national and regional economic factors.
The Company mitigates these risks by maintaining a close working relationship
with its borrowers, by obtaining cross-collateralization and personal guarantees
of its loans, and by diversification within its loan portfolio.

          Due to the nature of the Company's customer base, real estate is
frequently a material component of the collateral for its loans. The expected
source of repayment of these loans is generally the operations of the borrower's
business, but the real estate provides an additional measure of security. These
risks, however, are generally mitigated by the fact that real estate is
considered additional collateral on many of the Company's commercial loans and
such properties are typically owner-occupied.

          Risks associated with real estate loans include fluctuating land
values, changes in tax policies, and concentration of loans within the Company's
market area. The Company mitigates these risks by generally providing loans to
experienced commercial real estate owners and developers. The risk is further
mitigated by the number of commercial real estate loans made to the user of the
property.

          The aggregate amount of the Company's commercial loans without real
estate as primary or secondary collateral equaled approximately $78.3 million at
December 31, 1998, and represented 50.7% of such loans at that date. At such
date, commercial loans that were more than 90 days delinquent or nonaccruing
totaled approximately $773,000, or .5% of its commercial loan portfolio. The
aggregate amount of the Company's commercial loans with real estate as primary
or secondary collateral was approximately $76.3 million at December 31, 1998,
and at such date, approximately $402,000 in outstanding balances, or .3% of such
loans were delinquent or nonaccruing.

                                     - 5 -
<PAGE>   6
          CONSUMER LOANS. The Company offers several consumer loan products:
installment loans, home equity loans and credit cards.

          The Company has a good relationship with several car dealerships in
its market area, and as a result is able to do some financing of new and used
cars through these relationships. The Company only finances cars up to six years
old and requires a down payment of 10.0%. These loans generally have fixed rates
and maturities of three to five years.

          To a lesser degree, the Company makes small unsecured loans to
creditworthy individuals. These loans are typically between $2,000 and $5,000 at
fixed rates with maturities of less than five years. The Company also offers a
home equity loan product and, as a result of consumer demand, a credit card
product to its customers. Both products are underwritten to the same standards
as any of the Company's other consumer loan products.

          Loan officers underwrite installment loan and other consumer loan
requests in such a manner to assure compliance with the various regulations and
the Company's underwriting standards. Payment history on applicants is very
important on these smaller loans, and is checked through in-house records as
well as credit bureaus. Normally, collateral, such as an automobile, is taken as
security and the value is checked through the N.A.D.A. book or another valuation
service. Income must be adequate to cover all monthly payments including the
proposed loan.

          At December 31, 1998, the Company had approximately $65.1 million in
its consumer loan portfolio, which was 19.1% of the Company's total loans.
Approximately $360,000 of consumer loans were over 90 days delinquent or
nonaccruing on that date, which represented .6% of the consumer loan portfolio.

          LOAN SOLICITATION AND PROCESSING. Loan originations are developed from
a number of sources, including continuing business with depositors, other
borrowers and real estate developers, solicitations by the Company's lending
staff and walk-in customers.

          Underwriting guidelines for all branches and loan types are set by
senior management at the home office. Loan processing and underwriting, however,
are decentralized. Loan applications are generally processed and underwritten at
the branch level. Loan officers and branch managers review the applications, as
well as credit bureau reports, appraisals, financial information, verifications
of income, and other documentation concerning the credit-worthiness of the
borrower, as applicable to each loan type.

          Commercial loans are underwritten at the branch level with oversight
by area managers for each county. This decentralization of the loan underwriting
process allows loan officers and branch managers to respond more quickly to
applicants, and better serve its customers. The Company also benefits from this
decentralization in that every branch manager is well trained to originate all
types of loans, again allowing the branches to better serve their customers and
cross-sell the Company's loan products.

          Branch managers have the authority to approve loans which meet the
underwriting criteria set by management up to $120,000, and area managers have
authority for amounts up to $300,000. Any loan over $300,000 must be submitted
for approval by senior management.

          INCOME FROM LENDING ACTIVITIES. The Company earns interest and fee
income from its lending activities. The Company earns income from fees for
originating loans and for making commitments to originate loans and loan
participations. Certain of these fees, net of origination costs, are deferred
and amortized over the life of the respective loan. The Company also receives
loan fees related to existing loans, which include late charges. Income from
loan origination and commitment fees and discounts varies with the volume and
type of loans and commitments made and with competitive and economic conditions.
Note A-4 to the Consolidated Financial Statements contains a discussion of the
manner in which fees and income are recognized for financial reporting purposes.

                                     - 6 -
<PAGE>   7
Nonperforming Loans
-------------------

          GENERAL. Late charges on residential mortgages are assessed by the
Company if a payment is not received either by the 10th day following its due
date or 15th day if the loan has been sold in the secondary market and is being
serviced by the Company. Late charges on installment loans and commercial loans
are assessed by the Company if a payment is not received by the 10th day
following its due date. Any borrower whose payment was not received by this time
is mailed a past due notice. If the loan is still delinquent after a second past
due notice is mailed (generally around the 20th day of delinquency), a branch
employee will attempt to contact the customer to resolve any problem that might
exist.

          When an advanced stage of delinquency appears (generally around the
60th day of delinquency) and if repayment cannot be expected within a reasonable
amount of time or a repayment agreement has not been entered into, the Bank will
contact an attorney and request that the required 30-day prior notice of
foreclosure or repossession proceedings be prepared and delivered to the
borrower so that, if necessary, foreclosure proceedings may be initiated shortly
after the loan is 90 days delinquent. This procedure has historically aided in
achieving a low level of nonperforming loans and, as of December 31, 1998, only
$1.6 million or .5% of the Bank's total loan portfolio was 90 days or more past
due. As of December 31, 1998, the Company's level of nonperforming assets to
total assets was .37%.

          If a credit card account becomes 10 days delinquent, a notice is sent
to the account holder demanding that the payment be made so that the card is
current. Another notice is sent to the cardholder if the account becomes 20 days
delinquent. If payment is not received within 30 days, authorization requests
are denied, a message appears on the cardholder's account statement and a
follow-up telephone call is made. These telephone collection efforts and
statement messages continue until the account is deemed uncollectible. Legal
action is considered during this time. As of December 31, 1998, approximately
$22,000 in outstanding balances, or 1.6% of credit card loans were
nonperforming.

          On December 31, 1998, the Bank held no real estate and other
repossessed collateral acquired as a result of foreclosure, voluntary deed, or
other means. When the Bank has such real estate, it is classified as "other real
estate owned" until it is sold. When property is so acquired, it is recorded at
the lower of cost (the unpaid principal balance at the date of acquisition plus
foreclosure and other related costs) or fair value less estimated selling
expenses. Any subsequent write-down resulting therefrom is charged to expense.
Generally, unless the property is a one- to four-family residential dwelling and
well-collateralized, interest accrual ceases in 90 days but no later than the
date of acquisition. All costs incurred from that date in maintaining the
property are expensed. Other real estate owned is appraised during the
foreclosure process prior to the time of acquisition, and losses are recognized
for the amount by which the book value of the related mortgage loan exceeds the
estimated net realizable value of the property.

          Not categorized as nonperforming loans are certain potential problem
loans that management believes are adequately secured and for which no material
loss is expected, but as to which certain circumstances may cause the borrowers
to be unable to comply with the present loan repayment terms at some future
date. At December 31, 1998, there were no such potential problem loans.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     - 7 -
<PAGE>   8
          The following is a summary of the Company's loan loss experience and
selected ratios for the periods presented.

<TABLE>
<CAPTION>
                                                                                 YEAR ENDED DECEMBER 31,
                                                            ----------------------------------------------------------------
                                                              1998          1997          1996          1995          1994
                                                            --------      --------      --------      --------      --------
                                                                                  (DOLLARS IN THOUSANDS)
<S>                                                         <C>           <C>           <C>           <C>           <C>
Allowance for loan losses
     (beginning of period) ............................     $  3,744      $  2,934      $  2,367      $  2,186      $  1,922
Loans charged off:
     1-4 family residential real estate ...............          122            22            46            --            --
     Multi-family and commercial
       real estate ....................................           --            --            --             5            --
     Commercial and industrial loans ..................          180            68            79           225            60
     Consumer loans ...................................          510           402           323           352           178
                                                            --------      --------      --------      --------      --------
       Total loans charged off ........................          812           492           448           582           238
                                                            --------      --------      --------      --------      --------
Recoveries of loans previously
charged off:
     1-4 family residential real estate ...............            1            45            20            --             2
     Multi-family and commercial
       real estate ....................................           --            --            --            33             1
     Commercial and industrial loans ..................           15             5            --             1             2
     Consumer loans ...................................          130           102           136           148           134
                                                            --------      --------      --------      --------      --------
       Total recoveries ...............................          146           152           156           182           139
                                                            --------      --------      --------      --------      --------

Net loans charged off .................................          666           340           292           400            99
Provision for loan losses .............................        1,238         1,150           859           581           363
                                                            --------      --------      --------      --------      --------
Allowance for loan losses
     (end of period) ..................................     $  4,316      $  3,744      $  2,934      $  2,367      $  2,186
                                                            ========      ========      ========      ========      ========
Loans outstanding:
     Average, net .....................................     $314,973      $255,294      $213,031      $190,868      $169,800
     End of period ....................................     $345,009      $288,993      $240,603      $202,573      $180,231
Ratio of allowance for loan losses to loans
  outstanding at end of period ........................         1.25%         1.30%         1.22%         1.17%         1.21%
Ratio of net charge-offs to average
  loans outstanding ...................................         0.21%         0.12%         0.14%         0.21%         0.06%
</TABLE>

          At December 31, 1998, 1997, and 1996 the Company had nonaccrual loans
totaling $550,000, $795,000, and $808,000, respectively. Interest income that
would have been recognized if such loans had performed in accordance with
contractual terms totaled approximately $113,600, $71,000, and $15,000, for the
years ended December 31, 1998, 1997, and 1996. There was no interest income
recognized on such loans during any of the periods.

          ALLOWANCE FOR LOAN LOSSES. The amount of the allowance for loan losses
is based on management's analysis of risks inherent in the various segments of
the loan portfolio, management's assessment of known or potential problem
credits which have come to management's attention during the ongoing analysis of
credit quality, historical loss experience, current and anticipated economic
conditions and other factors. If actual circumstances and losses differ
substantially from management's assumptions and estimates, such allowance for
loan losses may not be sufficient to absorb all future losses, and net earnings
could be adversely affected. Loan loss estimates are reviewed periodically, and
adjustments, if any, are reported in earnings in the period in which they become
known. In addition, the Company maintains a portion of the allowance to cover
potential losses inherent in the portfolio which have not been specifically
identified.

          Although management believes that it uses the best information
available to make such determinations and that the allowance for loan losses is
adequate at December 31, 1998, future adjustments to the allowance may be

                                     - 8 -
<PAGE>   9
necessary, and net earnings could be affected, if circumstances and/or economic
conditions differ substantially from the assumptions used in making the initial
determinations. A downturn in the Southeastern Ohio economy and employment
levels could result in the Company experiencing increased levels of
nonperforming assets and charge-offs, increased provisions for loan losses and
reductions in income. Additionally, various regulatory agencies, as an integral
part of their examination process, periodically review the Company's allowance
for loan losses. Such agencies may require the recognition of additions to the
allowance based on their judgment of information available to them at the time
of their examination.

          The following table summarizes nonperforming assets by category.

<TABLE>
<CAPTION>
                                                        1998          1997          1996          1995          1994
                                                      --------      --------      --------      --------      --------
                                                                           (DOLLARS IN THOUSANDS)
<S>                                                   <C>           <C>           <C>           <C>           <C>
Real estate:
     Nonaccrual .................................     $    234      $    505      $    320      $    115      $    209
     Past due 90 days or more (1) ...............          248           109           142           295           208
Commercial and industrial:
     Nonaccrual .................................          251           143           267            --           150
     Past due 90 days or more (1) ...............          522            --            --           681            --
Consumer and other:
     Nonaccrual .................................           65           147           221            70            37
     Past due 90 days or more(1) ................          295           135            52           159            19
                                                      --------      --------      --------      --------      --------
         Total nonperforming loans ..............        1,615         1,039         1,002         1,320           623
Other real estate owned .........................           --            --            --            64           147
                                                      --------      --------      --------      --------      --------
         Total nonperforming assets .............     $  1,615      $  1,039      $  1,002      $  1,384      $    770
                                                      ========      ========      ========      ========      ========


Loans outstanding ...............................     $345,009      $288,993      $240,603      $202,573      $180,231
Allowance for possible loan losses
  to total loans ................................         1.25%         1.30%         1.22%         1.17%         1.21%
Nonperforming loans to total
  loans .........................................         0.47          0.36          0.42          0.65          0.35
Nonperforming assets to total assets ............         0.37          0.29          0.32          0.52          0.32
Allowance for possible loan losses to
  nonperforming loans ...........................        267.2%        360.4%        292.8%        179.3%        350.9%
</TABLE>

----------

(1)  Represents accruing loans delinquent greater than 90 days which are
     considered by management to be well secured and in the process of
     collection.


          As of December 31, 1998, the Company had no loans that were not
included in the nonaccrual, past due 90 days or more or restructured categories
where the borrowers were experiencing potential credit problems that raised
doubts as to the ability of the borrowers to comply with the present loan
repayment terms.

          CLASSIFIED ASSETS. The FDIC regulations on classification of assets
require commercial banks to classify their own assets and to establish
appropriate general and specific allowances for losses, subject to FDIC review.
These regulations are designed to encourage management to evaluate assets on a
case-by-case basis and to discourage automatic classifications. Assets
classified as substandard or doubtful must be evaluated by management to
determine a reasonable general loss reserve which is included in total capital
for purposes of the bank's risk-based capital requirement, but which is not
included in core capital or tangible capital or in capital under generally
accepted accounting principles. Assets classified as loss must either be written
off or reserved for by a specific allowance which is not counted toward capital
for purposes of any of the regulatory capital requirements.

          INVESTMENTS. Investment securities primarily satisfy the Company's
liquidity needs and provide a return on residual funds after lending activities.
Pursuant to the Company's written investment policy, investments may be in

                                     - 9 -
<PAGE>   10
interest-bearing deposits, U.S. Government and agency obligations, state and
local government obligations and government-guaranteed mortgage-backed
securities. The Company does not make any investments in securities which are
rated less than investment grade by a nationally recognized statistical rating
organization. A goal of the Company's investment policy is to limit interest
rate risk wherever possible.

          All securities-related activity is reported to the Board. General
changes in investment strategy are required to be reviewed and approved by the
Board. The Company's senior management can purchase and sell securities on
behalf of the Company in accordance with the Company's stated investment policy.

          The following table sets forth the carrying value of the Company's
investment portfolio at the dates indicated and includes investments designated
as available for sale.

<TABLE>
<CAPTION>
                                                                                   AT DECEMBER 31,
                                                                    -------------------------------------------
                                                                      1998        1997        1996        1995
                                                                    -------     -------     -------     -------
                                                                              (DOLLARS IN THOUSANDS)
<S>                                                                 <C>         <C>         <C>         <C>
U.S. Government and agency obligations ........................     $    --     $    --     $    --     $    --

State and local government obligations ........................          --          --          --          --
                                                                    -------     -------     -------     -------
         Total investment securities held to maturity .........          --          --          --          --

Investment securities designated as available for sale ........      50,584      47,839      41,419      29,754
                                                                    -------     -------     -------     -------
         Total investment securities ..........................     $50,584     $47,839     $41,419     $29,754
                                                                    =======     =======     =======     =======
</TABLE>

          The following table reflects the maturities of the Company's
investment securities at December 31, 1998.

<TABLE>
<CAPTION>
                                                                               DUE AFTER FIVE
                                     DUE IN ONE YEAR    DUE AFTER ONE YEAR      YEARS THROUGH
                                         OR LESS        THROUGH FIVE YEARS        TEN YEARS       DUE AFTER TEN YEARS
                                     ---------------    ------------------     ---------------    -------------------
      INVESTMENT SECURITIES          AMOUNT     RATE      AMOUNT     RATE      AMOUNT     RATE      AMOUNT     RATE      TOTAL
      ---------------------          ------     ----      ------     ----      ------     ----      ------     ----      -----
<S>                                  <C>        <C>       <C>        <C>       <C>         <C>       <C>      <C>       <C>
Available for Sale:
  U.S. Government and
    agency obligations .........     $5,030     7.30%     $8,125     6.26%     $34,210     6.50%     $749     7.61%     $48,114
  Municipal obligations ........        141     3.98       1,728     4.96          601     4.41        --       --        2,470
                                     ------     ----      ------     ----      -------     ----      ----     ----      -------
Total investment securities ....     $5,171     7.15%     $9,853     6.03%     $34,811     6.47%     $749     7.61%     $50,584
                                     ======     ====      ======     ====      =======     ====      ====     ====      =======
</TABLE>

          The following table sets forth the carrying value of the Company's
mortgage-backed securities portfolio, including securities designated as
available for sale, at the dates indicated:

<TABLE>
<CAPTION>
                                                                          AT DECEMBER 31
                                                              ----------------------------------------
                                                               1998       1997       1996        1995
                                                              ------     ------     ------     -------
                                                                       (DOLLARS IN THOUSANDS)
<S>                                                           <C>        <C>        <C>        <C>
Federal National Mortgage
          Association (FNMA) ............................     $2,792     $1,292     $3,418     $ 4,082

Federal Home Loan Mortgage
          Corporation (FHLMC) ...........................      1,990      1,731      4,937       5,355

Government National Mortgage Association (GNMA) .........      1,777      1,127      1,397       1,706

Collateralized mortgage obligations .....................         --         --         --          --
                                                              ------     ------     ------     -------

Total mortgage-backed securities ........................     $6,559     $4,150     $9,752     $11,143
                                                              ======     ======     ======     =======
</TABLE>

                                     - 10 -
<PAGE>   11
          The following table sets forth the amount of the Company's
mortgage-backed securities portfolio having fixed rates and the amount having
adjustable rates at the dates indicated:

<TABLE>
<CAPTION>
                                                                        AT DECEMBER 31,
                                      ------------------------------------------------------------------------------------
                                            1998                  1997                  1996                  1995
                                      ------------------    ------------------    ------------------    ------------------
                                      AMOUNT     PERCENT    AMOUNT     PERCENT    AMOUNT     PERCENT    AMOUNT     PERCENT
                                      ------     -------    ------     -------    ------     -------    ------     -------
                                                                     (Dollars in thousands)
<S>                                   <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Fixed rate ......................     $4,144      63.2%     $1,954      47.1%     $3,268      33.5%     $ 3,309      29.7%

Adjustable rate .................      2,415      36.8       2,196      52.9       6,484      66.5        7,834      70.3
                                      ------     -----      ------     -----      ------     -----      -------     ----- 
Total mortgage-backed
  securities ....................     $6,559     100.0%     $4,150     100.0%     $9,752     100.0%     $11,143     100.0%
                                      ======     =====      ======     =====      ======     =====      =======     =====
</TABLE>

          The following table reflects the estimated principal repayments or
repricing of the Company's mortgage-backed securities at December 31, 1998.

<TABLE>
<CAPTION>
                                                                             DUE AFTER FIVE
                               DUE IN ONE YEAR      DUE AFTER ONE YEAR       YEARS THROUGH
                                   OR LESS          THROUGH FIVE YEARS         TEN YEARS           DUE AFTER TEN YEARS
                               ---------------      ------------------      ------------------     -------------------
                                      WEIGHTED               WEIGHTED                 WEIGHTED                 WEIGHTED
                                       AVERAGE                AVERAGE                  AVERAGE                  AVERAGE
MORTGAGE-BACKED SECURITIES      AMOUNT  RATE         AMOUNT    RATE         AMOUNT      RATE         AMOUNT      RATE       TOTAL
--------------------------      ------  ----         ------    ----         ------      ----         ------      ----       -----
                                                                      (DOLLARS IN THOUSANDS)
<S>                             <C>   <C>            <C>     <C>            <C>       <C>            <C>       <C>         <C>
Available for sale:
Fixed rate .................     $--      --          $346     7.00%         $1,610     7.66%         $2,188     6.70%     $4,144

  Variable rate ............      --      --            --       --              --       --           2,415     6.99       2,415
                                 ---     ---          ----     ----          ------     ----          ------     ----      ------
Total mortgage-backed
  securities ...............     $--      --          $346     7.00%         $1,610     7.66%         $4,603     6.85%     $6,559
                                 ===     ===          ====     ====          ======     ====          ======     ====      ======
</TABLE>

Source of Funds
---------------

          DEPOSIT ACCOUNTS. Savings deposits are a major source of the Company's
funds. The Company offers a number of alternatives for depositors designed to
attract both commercial and regular consumer checking and savings including
regular and money market savings accounts, NOW accounts, and a variety of
fixed-maturity, fixed-rate certificates with maturities ranging from seven days
to 120 months. The Company also provides travelers' checks, official checks,
money orders, ATM services and IRA accounts.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     - 11 -
<PAGE>   12
          The distribution of the Company's deposit accounts by type and rate is
set forth in the following table.

<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,
                                          ------------------------------------------------------------------------------------------
          TYPE OF ACCOUNT                        1998                    1997                    1996                    1995
                AND                       ------------------      ------------------      ------------------      ------------------
           INTEREST RATE                  AMOUNT     PERCENT      AMOUNT     PERCENT      AMOUNT     PERCENT      AMOUNT     PERCENT
           -------------                  ------     -------      ------     -------      ------     -------      ------     -------
                                                                            (DOLLARS IN THOUSANDS)
<S>                                      <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
Demand deposit accounts ............     $ 38,258      10.5%     $ 30,369      10.1%     $ 22,673       8.7%     $ 19,392       8.4%

Savings accounts ...................       42,423      11.6        41,259      13.7        40,618      15.7        40,823      17.7

NOW accounts .......................       25,604       7.0        24,143       8.0        22,725       8.8        20,753       9.0

Money market deposit accounts ......        6,333       1.7         6,911       2.3         6,690       2.6         7,281       3.1

Premium investment accounts ........       21,012       5.7        19,161       6.3        22,696       8.8        14,198       6.2

Select investment accounts .........       16,456       4.5         7,234       2.4         1,267       0.5            --        --
                                         --------     -----      --------     -----      --------     -----      --------     ----- 

Total transaction accounts .........      150,086      41.0       129,077      42.8       116,669      45.1       102,447      44.4

CERTIFICATES:
     2.00 - 4.99% ..................       27,941       7.6        14,606       4.8        20,853       8.1        21,081       9.1

     5.00 - 6.99% ..................      187,875      51.3       157,835      52.3       113,267      43.8        89,260      38.7

     7.00 - 9.00% ..................          188       0.1           447       0.1         7,833       3.0        17,890       7.8
                                         --------     -----      --------     -----      --------     -----      --------     ----- 

Total certificates of deposit ......      216,004      59.0       172,888      57.2       141,953      54.9       128,231      55.6
                                         --------     -----      --------     -----      --------     -----      --------     ----- 

Total deposits .....................     $366,090     100.0%     $301,965     100.0%     $258,622     100.0%     $230,678     100.0%
                                         ========     =====      ========     =====      ========     =====      ========     ===== 
</TABLE>

          The following table presents, by various interest rate categories,
certain information concerning maturities of the Company's certificates of
deposit as of December 31, 1998.

<TABLE>
<CAPTION>
                                      WITHIN      ONE TO        OVER
CERTIFICATE OF DEPOSIT ACCOUNTS      ONE YEAR   THREE YEARS   THREE YEARS    TOTAL
-------------------------------      --------   -----------   -----------    -----
                                                     (IN THOUSANDS)
<S>                                  <C>        <C>           <C>          <C>
4.00% and less .................     $  1,332     $   633       $   --     $  1,965

4.01% to 5.00% .................       46,115      19,448          409       65,972

5.01% to 6.00% .................      102,781      33,737        2,360      138,878

6.01% to 7.00% .................        7,509       1,150          342        9,001

7.01% to 8.00% .................          138           1           49          188
                                     --------     -------       ------     --------
Total ..........................     $157,875     $54,969       $3,160     $216,004
                                     ========     =======       ======     ========
</TABLE>

          The following table sets forth the amount of the Company's
certificates of deposit that are $100,000 or greater by time remaining until
maturity as of December 31, 1998.

                                     - 12 -
<PAGE>   13
<TABLE>
<CAPTION>
                                                                  AMOUNT
                                                                  ------
                      MATURITY PERIOD                          (IN THOUSANDS)
                      ---------------
<S>                                                            <C>
                      Three months or less                        $18,667
                      Over three through six months                20,912
                      Over six through 12 months                   20,518
                      Over 12 months                               12,860
                                                                  -------
                                 Total                            $72,957
                                                                  =======
</TABLE>

          BORROWINGS. Deposits and repayment of loan principal are the primary
source of funds for the Company's lending activities and other general business
purposes. However, during periods when the supply of lendable funds cannot meet
the demand for loans, the Company can obtain funds necessary through loans
(advances) from the FHLB of Cincinnati. Advances from the FHLB may be on a
secured or unsecured basis depending upon a number of factors, including the
purpose for which the funds are being borrowed and existing advances
outstanding. The Company typically utilizes FHLB advances to fund long-term
fixed rate commercial loans and to meet short-term liquidity needs. As of
December 31, 1998, the Bank had outstanding FHLB advances totaling $23.8
million. See Note F to the consolidated financial statements for additional
information regarding FHLB advances. The Company also has arrangements to borrow
funds from commercial banks. The Company does not solicit brokered deposits.

          The following table sets forth the maximum amount of the Company's
FHLB advances and other borrowings outstanding at any month end during the
periods shown and the average aggregate balances of FHLB advances and other
borrowings for such periods:

<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31,
                                                    ----------------------------
                                                      1998       1997      1996
                                                    -------    -------   -------
                                                       (DOLLARS IN THOUSANDS)
<S>                                                 <C>        <C>       <C>    
Maximum amount outstanding:
   FHLB advances                                    $24,033    $28,868   $21,447

  Average amount of FHLB advances and
   other borrowings outstanding                      18,904     25,820    15,006

  Weighted average interest rate of total
    borrowings based on quarter end balances           5.91%      6.39%     6.57%
</TABLE>

                                     - 13 -
<PAGE>   14
          The following table sets forth certain information as to the Company's
FHLB advances and other borrowings at the dates indicated:

<TABLE>
<CAPTION>
                                                   DECEMBER 31,
                                          -----------------------------
                                            1998       1997       1996
                                          -------    -------    -------
                                              (DOLLARS IN THOUSANDS)
<S>                                       <C>        <C>        <C>
FHLB advances                             $23,784    $24,705    $21,437
Other borrowings                               --         --         --
    Total borrowings                      $23,784    $24,705    $21,437
                                          =======    =======    =======
</TABLE>

Personnel
---------

          At December 31, 1998, the Company and its subsidiaries employed 178
persons on a full-time basis and 28 persons on a part-time basis.

Executive Offices
-----------------

          The Company's executive office is located at 14621 State Route 93,
Jackson, Ohio 45640 and its telephone number is (740) 286-3283.

Subsidiaries
------------

          The Company owns all of the outstanding stock of Oak Hill Banks, an
Ohio state-chartered bank, which was founded in 1902. The Company owns all of
the outstanding stock of Action Finance Company, a consumer finance company
which was formed in 1998.

Regulation
----------

          Oak Hill Banks, as an Ohio state-chartered bank, is subject to
supervision and regular examination by the Superintendent of Financial
Institutions of the State of Ohio. It is insured by the Federal Deposit
Insurance Corporation and is subject to the provisions of the Federal Deposit
Insurance Act. To the extent that the information below consists of summaries of
certain statutes or regulations, it is qualified in its entirety by reference to
the statutory or regulatory provisions described.

          The Company is subject to the provisions of the Bank Holding Company
Act of 1956, as amended (the "Act"), which requires a bank holding company to
register under the Act and to be subject to supervision and examination by the
Board of Governors of the Federal Reserve System. As a bank holding company, the
Company is required to file with the Board of Governors an annual report and
such additional information as the Board of Governors may require pursuant to
the Act. The Act requires prior approval by the Board of Governors of the
acquisition by a bank holding company, or any subsidiary thereof, of 5% or more
of the voting stock or substantially all the assets of any bank within the
United States.

          As a bank holding company located in the State of Ohio, the Company is
not permitted to acquire a bank or other financial institution located in
another state unless such acquisition is specifically authorized by the statutes
of such state. The Act further provides that the Board of Governors shall not
approve any such acquisition that would result in a monopoly or would be in
furtherance of any combination or conspiracy to monopolize or attempt to
monopolize the business of banking in any part of the United States, or the
effect of which may be to substantially lessen competition or to create a
monopoly in any section of the country, or that in any other manner would be in
restraint of trade, unless the anti-competitive effects of the proposed
transaction are clearly outweighed in the public interest by the probable effect
of the transaction in meeting the convenience and needs of the community to be
served.

          The Act also prohibits a bank holding company, with certain
exceptions, from acquiring 5% or more of the voting stock of any company that is
not a bank and from engaging in any business other than banking or performing
services for its banking subsidiary without the approval of the Board of
Governors. In addition, the acquisition of a

                                     - 14 -
<PAGE>   15
thrift institution must be approved by the Office of Thrift Supervision pursuant
to the savings and loan holding company provisions of the Home Owners' Loan Act
of 1933, as amended by FIRREA. The Board of Governors is also authorized to
approve, among other things, the ownership of shares by a bank holding company
in any company the activities of which the Board of Governors has determined to
be so closely related to banking or managing or controlling banks as to be a
proper incident thereto. The Board of Governors has, by regulation, determined
that certain activities, including mortgage banking, operating small loan
companies, factoring, furnishing certain data processing operations, holding or
operating properties used by banking subsidiaries or acquired for such future
use, providing certain investment and financial advice, leasing (subject to
certain conditions) real or personal property, providing management consulting
advice to certain depository institutions, providing securities brokerage
services, arranging commercial real estate equity financing, underwriting and
dealing in government obligations and money market instruments, providing
consumer financial counseling, operating a collection agency, owning and
operating a savings association, operating a credit bureau and conducting
certain real estate investment activities and acting as insurance agent for
certain types of insurance, are closely related to banking within the meaning of
the Act. It also has determined that certain other activities, including real
estate brokerage and syndication, land development, and property management are
not related to credit transactions and are not permissible. The Act and the
regulations of the Board of Governors prohibit a bank holding company and its
subsidiaries from engaging in certain tie-in arrangements in connection with any
extension of credit, lease or sale of property, or furnishing of services. The
Act also imposes certain restrictions upon dealing by affiliated banks with the
holding company and among themselves including restrictions on interbank
borrowing and upon dealings in respect to the securities or obligations of the
holding company or other affiliates.

          The earnings of banks and consumer finance companies, and therefore
the earnings of the Company (and its subsidiaries), are affected by the policies
of regulatory authorities, including the Board of Governors of the Federal
Reserve System. An important function of the Federal Reserve Board is to
regulate the national supply of bank credit in an effort to prevent recession
and to restrain inflation. Among the procedures used to implement these
objectives are open market operations in U.S. Government securities, changes in
the discount rate on member bank borrowings, and changes in reserve requirements
against member bank deposits. These procedures are used in varying combinations
to influence overall growth and distribution of bank loans, investments and
deposits, and their use also may affect interest rates charged on loans or paid
for deposits. Monetary policies of the Federal Reserve Board have had a
significant effect on the operating results of commercial banks in the past and
are expected to continue to do so in the future. The effect, if any, of such
policies upon the future business and earnings of the Company cannot accurately
be predicted. The Company makes no attempt to predict the effect on its revenues
and earnings of changes in general economic, industrial, and international
conditions or in legislation and governmental regulations.

Business Risks
--------------

          Except for the historical information contained herein, the matters
discussed in this Form 10-K include certain forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are
intended to be covered by the safe harbors created thereby. Those statements
include, but may not be limited to, all statements regarding the intent, belief
and expectations of the Company and its management, such as statements
concerning the Company's future profitability. Investors are cautioned that all
forward-looking statements involve risks and uncertainties including, without
limitation, factors detailed from time to time in the Company's filings with the
Securities and Exchange Commission. Although the Company believes that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate. Therefore, there can be
no assurance that the forward-looking statements contained herein are
reasonable, and any of the assumptions could be inaccurate. Therefore, there can
be no assurance that the forward-looking statements included in this Form 10-K
will prove to be accurate, and in light of the significant uncertainties
inherent in the forward-looking statements included herein, the inclusion of
such information should not be regarded as a presentation by the Company or any
other person that the objectives and plans of the Company will be achieved.

                                     - 15 -
<PAGE>   16
          Growth Strategy. The Company has pursued and continues to pursue a
strategy of growth. The success of the Company's growth strategy will depend
largely upon its ability to manage its credit risk and control its costs while
providing competitive products and services. This growth strategy may present
special risks, such as the risk that the Company will not efficiently handle
growth with its present operations, the risk of dilution of book value and
earnings per share as a result of an acquisition, the risk that earnings will be
adversely affected by the start-up costs associated with establishing new
products and services, the risk that the Company will not be able to attract and
retain qualified personnel needed for expanded operations, and the risk that its
internal monitoring and control systems may prove inadequate.

          Potential Impact of Changes In Interest Rates. The Company's results
of operations are dependent to a large degree on net interest income, the
difference between interest income from loans and investments and interest
expense on deposits and borrowings. One common measurement of interest rate
risk, known as the interest rate gap, is the difference between interest-earning
assets and interest-bearing liabilities repricing or maturing within various
time frames, expressed as a percentage of total assets. At December 31, 1998,
the Company had a cumulative interest rate gap of 2.22% of total assets for one
year.

          Control by Management; Anti-Takeover Provisions. Evan E. Davis, John
D. Kidd and D. Bruce Knox (the "Principal Stockholders") own in the aggregate
approximately 35.3% of the outstanding shares of Common Stock of the Company. In
addition to Ohio and federal laws and regulations governing changes in control
of insured depository institutions, the Company's Articles of Incorporation and
Code of Regulations contain certain provisions which may delay or make more
difficult an acquisition of control of the Company. For example, the Company's
Articles of Incorporation do not exempt the Company from the provisions of
Ohio's "control share acquisition" and "merger moratorium" statutes. Assuming
that the Principal Stockholders continue to retain at least a majority of the
outstanding voting shares of the Company, such ownership position could be
expected to deter any prospective acquiror from seeking to acquire ownership or
control of the Company, and the Principal Stockholders would be able to defeat
any acquisition proposal that requires approval of the Company's stockholders,
if the Principal Stockholders chose to do so. In addition, the Principal
Stockholders may make a private sale of shares of common stock of the Company
which they own, including to a person seeking to acquire ownership or control of
the Company. The Company has 3,000,000 shares of authorized but unissued
preferred stock, par value $ .01 per share, which may be issued in the future
with such rights, privileges and preferences as are determined by the Board of
Directors of the Company. In December 1997, the Board of Directors of the
Company approved and adopted a stockholder rights plan that contemplates the
issuance of rights to purchase preferred stock of the Company to the Company's
common stockholders of record as of February 17, 1998, as set forth in the
Rights Agreement entered into between the Company and Fifth Third Bank on
January 23, 1998.

          Limited Trading Market; Shares Eligible for Future Sale; Possible
Volatility of Stock Price. The Common Stock is traded on the Nasdaq National
Market under the symbol "OAKF." During the 12 months ending March 12, 1998, the
average weekly trading volume in the Common Stock has been less than 23,400
shares per week. There can be no assurance given as to the liquidity of the
market for the Common Stock or the price at which any sales may occur, which
price will depend upon, among other things, the number of holders thereof, the
interest of securities dealers in maintaining a market in the Common Stock and
other factors beyond the control of the Company. The market price of the Common
Stock could be adversely affected by the sale of additional shares of Common
Stock owned by the Company's current shareholders. The Principal Shareholders
are permitted to sell certain limited amounts of Common Stock without
registration, pursuant to Rule 144 under the Securities Act. The market price
for the Common Stock could be subject to significant fluctuations in response to
variations in quarterly and yearly operating results, general trends in the
banking industry and other factors. In addition, the stock market can experience
price and volume fluctuations that may be unrelated or disproportionate to the
operating performance of affected companies. These broad fluctuations may
adversely affect the market price of the Common Stock.

          Dependence on Management. The Company's success depends to a great
extent on its senior management, including its Chairman, Evan E. Davis;
President, John D. Kidd; Executive Vice President, Richard P. LeGrand; and
Secretary/Treasurer, H. Tim Bichsel. The loss of their individual services could
have a material adverse impact

                                     - 16 -
<PAGE>   17
on the Company's financial stability and its operations. In addition, the
Company's future performance depends on its ability to attract and retain key
personnel and skilled employees, particularly at the senior management level.
The Company's financial stability and its operations could be adversely affected
if, for any reason, one or more key executive officers ceased to be active in
the Company's management. The Company does not own or currently plan to acquire
"key man" life insurance on the lives of any of its key employees.

          Competition. Banking institutions operate in a highly competitive
environment. The Company competes with other commercial banks, credit unions,
savings institutions, finance companies, mortgage companies, mutual funds, and
other financial institutions, many of which have substantially greater financial
resources than the Company. Certain of these competitors offer products and
services that are not offered by the Company and certain competitors are not
subject to the same extensive laws and regulations as the Company. Additionally,
consolidation of the financial services industry in Ohio and in the Midwest in
recent years has increased the level of competition. Recent and proposed
regulatory changes may further intensify competition in the Company's market
area.

          Holding Company Structure; Government Regulations and Policies. The
Company is a single-bank holding company, the profitability of which is entirely
dependent on the profitability of the Bank and the upstream payment of dividends
from the Bank to the Company. Under state and federal banking law, the payment
of dividends by the Company and the Bank is subject to capital adequacy
requirements. The inability of the Bank to generate profits and pay such
dividends to the Company, or regulator restrictions on the payment of such
dividends to the Company even if earned, would have an adverse effect on the
financial condition and results of operations of the Company and the Company's
ability to pay dividends to the shareholders.

ITEM 2.   PROPERTIES.

          The registrant and its subsidiaries operate from 17 full-service
banking offices, 2 full-service consumer financing offices, and one loan
production office in Ohio. In addition, the Company operates two executive
offices in Jackson, Ohio. The offices are located in the following counties:

          Jackson -  Oak Hill, Jackson, Ironmakers, Jackson Walmart, Wellston,
                     both executive offices, Action Finance Jackson, and Action
                     Finance Wellston
          Ross -     Richmond Dale, Chillicothe, and Chillicothe K-Mart
          Scioto -   Wheelersburg, Portsmouth, and West Portsmouth
          Gallia -   Gallipolis and loan production office
          Pickaway - Circleville
          Warren -   Franklin
          Butler -   Trenton
          Vinton -   McArthur
          Athens -   Athens

          The following table indicates which properties are leased by the
Company, the term of the lease, and end of lease options. All leases are
comparable to other leases in the respective market areas and do not contain
provisions detrimental to the registrant or its subsidiaries.

<TABLE>
<CAPTION>
                            BEGINNING & LENGTH    END OF LEASE FIVE YEAR RENEWAL
BRANCH                           OF TERM            ONE       TWO       THREE
<S>                          <C>      <C>           <C>       <C>       <C>
Chillicothe                  11/1/98  5 years        X
Chillicothe K-Mart           6/28/94  5 years                  X
West Portsmouth              2/18/97  8 years                             X
Jackson Walmart              10/28/98 5 years                  X
</TABLE>

                                     - 17 -
<PAGE>   18
<TABLE>
<S>                          <C>      <C>           <C>       <C>       <C>
Administrative Offices II    10/1/98  5 years        X
Action Finance Jackson       1/14/98  5 years                  X
Action Finance Wellston      1/3/98   5 years                  X
Gallipolis loan office       8/1/98   1 year        Lease can be extended on a
                                                    month to month basis.
</TABLE>

ITEM 3.   LEGAL PROCEEDINGS.

          Except for routine litigation incident to their business, the
registrant and its subsidiaries are not a party to any material pending legal
proceedings and none of their property is the subject of any such proceedings.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          No matters were submitted to the shareholders during the fourth
quarter of 1998.


                                     PART II

ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
          MATTERS.

SHAREHOLDER INFORMATION

          The common stock of the Company is traded on the Nasdaq National
Market System under the symbol "OAKF."

          The high and low sales prices for the Company common stock during each
quarter of 1997 and 1998 are as follows:

<TABLE>
<CAPTION>
QUARTER
ENDED                   HIGH             LOW
<S>                     <C>             <C>
3/31/97                 11.40            9.80
6/30/97                 16.80           10.80
9/30/97                 16.80           15.40
12/31/97                18.80           15.40
3/31/98                 23.20           17.60
6/30/98                 24.00           17.76
9/30/98                 27.00           16.00
12/31/98                20.67           15.38
</TABLE>

          At March 16, 1999, the Company had approximately 2,200 stockholders of
record and 4,367,765 shares of common stock outstanding.

          Dividends. The ability of the Company to pay cash dividends to
stockholders is limited by its ability to receive dividends from its subsidiary.
The State of Ohio places certain limitations on the payment of dividends by Ohio
state-chartered banks.


                                     - 18 -
<PAGE>   19
          The Company declared the following quarterly cash dividends in 1997
and 1998:

<TABLE>
<CAPTION>
QUARTER                     DIVIDEND
ENDED                       DECLARED
-----                       --------
<S>                         <C> 
3/31/97                       0.05
6/30/97                       0.05
9/30/97                       0.05
12/31/97                      0.06
3/31/98                       0.06
6/30/98                       0.07
9/30/98                       0.07
12/31/98                      0.09
</TABLE>

Future cash and stock dividends will be subject to determination and declaration
by the Board of Directors and will consider, among other factors, the Company's
financial condition and results of operations, investment opportunities, capital
requirements, and regulatory limitations.

          Stock Transfer Agent. Inquiries regarding stock transfer,
registration, lost certificates, or changes in name and address should be
directed in writing to the Company's stock transfer agent:

Fifth Third Bank
Stock Transfer Department
38 Fountain Square Plaza, MD 1090F5
Cincinnati, OH 45263
(513) 579-5320
(800) 837-2755

          Annual Meeting of Shareholders. The Annual Meeting of Shareholders of
Oak Hill Financial, Inc. will be held on April 27, 1999, at 1:00 p.m. at the
Ohio State University Extension South District Office, 17 Standpipe Road,
Jackson, Ohio (the Extension Office is located just off State Route 93, 1.7
miles south of Jackson).


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     - 19 -
<PAGE>   20
ITEM 6.   SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                              AT OR FOR THE YEAR ENDED DECEMBER 31,
                                                    1998         1997          1996         1995          1994
<S>                                               <C>          <C>           <C>          <C>           <C>
SUMMARY OF FINANCIAL CONDITION (1)

Total assets                                      $429,979     $361,917      $311,854     $268,322      $238,806
Interest-bearing deposits
   and federal funds sold                            9,687        3,773         4,135       10,956         1,514
Investment securities (2)                           57,143       51,989        51,171       40,987        43,708
Loans receivable --- net (3)                       340,693      285,249       237,669      200,206       178,045
Deposits                                           366,090      301,965       258,622      230,678       209,805
Federal Home Loan Bank (FHLB)
   advances and other borrowings (4)                24,724       24,963        21,437        8,905         8,161
Stockholders' equity                                37,470       33,349        30,349       27,502        19,734


SUMMARY OF OPERATIONS (1)

Interest income                                   $ 32,953     $ 28,254      $ 24,169     $ 21,097      $ 17,529
Interest expense                                    15,731       13,707        11,619       10,844         7,817
                                                  --------     --------      --------     --------      --------

   Net interest income                              17,222       14,547        12,550       10,253         9,712
Provision for loan losses                            1,238        1,150           859          581           363
                                                  --------     --------      --------     --------      --------

   Net interest income after
      provision for loan losses                     15,984       13,397        11,691        9,672         9,349
Gain on sale of loans                                  855          163            85           57            28
Gain (loss) on sale of assets                          240          (60)           25          (77)          (67)
Other non-interest income                            1,483        1,310         1,291        1,119           858
General, administrative and other expense (5)        9,603        9,050         7,606        6,567         6,504
                                                  --------     --------      --------     --------      --------

   Earnings before federal income
      taxes                                          8,959        5,760         5,486        4,204         3,664
Federal income taxes                                 2,918        2,052         1,774        1,425         1,229
                                                  --------     --------      --------     --------      --------

Net earnings                                      $  6,041     $  3,708      $  3,712     $  2,779      $  2,435
                                                  ========     ========      ========     ========      ========


PER SHARE INFORMATION (6)

Basic earnings per share                          $   1.37     $    .84      $    .84     $    .72      $    .66
Book value                                            8.58         7.58          6.90         6.26          5.17
</TABLE>

                                     - 20 -
<PAGE>   21
<TABLE>
<CAPTION>
                                                              AT OR FOR THE YEAR ENDED DECEMBER 31,
                                                    1998         1997          1996         1995          1994
<S>                                               <C>          <C>           <C>          <C>           <C>
OTHER STATISTICAL AND
OPERATING DATA

Return on average assets                              1.53%        1.09%         1.29%        1.08%         1.05%
Return on average equity                             16.91        11.70         12.88         11.64        12.84
Net interest margin                                   4.51         4.54          4.56          4.12         4.40
Interest rate spread during period                    3.76         3.95          3.91          3.43         3.88
Non-interest expense to average assets                2.43         2.67          2.64          2.55         2.80
Total allowance for loan losses
   to nonperforming loans                            268.9        360.4         292.8         144.8        350.9
Total allowance for loan losses
   to total loans                                     1.25         1.30          1.22          1.17         1.21
Nonperforming loans to total loans                    0.47         0.36          0.42          0.81         0.35
Nonperforming assets to total assets                  0.37         0.29          0.32          0.63         0.32
Net charge-offs to average loans                      0.21         0.12          0.14          0.21         0.06
Equity to assets at period end                        8.71         9.21          6.87         10.25         8.26
Dividend payout ratio                                21.46        25.48         21.43          9.29         5.31
</TABLE>

-------------------

(1) The Company merged Unity Savings Bank with and into its Oak Hill Banks
    subsidiary on October 2, 1997. The merger was accounted for as a
    pooling-of-interests. Accordingly, the consolidated financial
    statements as of and for the years ended December 31, 1994 through
    1996, inclusive, have previously been restated as if the merger had
    occurred on January 1, 1994.

(2) Includes investment securities designated as held to maturity at
    December 31, 1994. The Company adopted Statement of Financial
    Accounting Standards ("SFAS") No. 115, "Accounting for Certain
    Investments in Debt and Equity Securities" as of January 1, 1994.
    Since December 1995, all investment securities have been classified as
    available for sale. See Notes A-2 and B of Notes to Consolidated
    Financial Statements for additional information regarding the
    composition and classification of investment securities pursuant to
    this Statement.

(3) Includes loans held for sale.

(4) FHLB advances and other borrowings at December 31, 1994, included $2.1
    million of notes payable to principal shareholders.

(5) Non-interest expense for 1997 includes $920,000 in pre-tax expenses
    incurred pursuant to the merger with Unity Savings Bank.

(6) Per share information gives retroactive effect to the 700-for-1 stock
    split effected October 11, 1995, the issuance of 643,690 shares in the
    Unity transaction, and the 5-for-4 stock split effected June 1, 1998.

                               - 21 -
<PAGE>   22
ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS.

OVERVIEW

          The principal asset of Oak Hill Financial, Inc. (the "Company") is its
ownership of Oak Hill Banks (the "Bank") and Action Finance Company ("Action").
Accordingly, the Company's results of operations are primarily dependent upon
the results of operations of the Bank and Action. The Bank conducts a general
commercial banking business that consists of attracting deposits from the
general public and using those funds to originate loans for commercial,
consumer, and residential purposes.

          The Bank's and Action's profitability depends primarily on their net
interest income, which is the difference between interest income generated from
interest-earning assets (i.e., loans and investments) less the interest expense
incurred on interest-bearing liabilities (i.e., deposits and borrowed funds).
Net interest income is affected by the relative amounts of interest-earning
assets and interest-bearing liabilities, and the interest rates paid on these
balances. Additionally, and to a lesser extent, profitability is affected by
such factors as the level of non-interest income and expenses, the provision for
loan losses, and the effective tax rate. Non-interest income consists primarily
of service charges and other fees and income from the sale of loans.
Non-interest expenses consist of compensation and benefits, occupancy related
expenses, FDIC deposit insurance premiums, and other operating expenses.

          Management's discussion and analysis of earnings and related financial
data are presented herein to assist investors in understanding the consolidated
financial condition and results of operations of the Company as of and for the
years ended December 31, 1998 and 1997. This discussion should be read in
conjunction with the consolidated financial statements and related footnotes
presented elsewhere in this report.

FORWARD-LOOKING STATEMENTS

          In the following pages, management presents an analysis of the
Company's financial condition as of December 31, 1998, and the results of
operations for the year ended December 31, 1998 as compared to prior periods. In
addition to this historical information, the following discussion contains
forward-looking statements that involve risks and uncertainties. Economic
circumstances, the Company's operations and the Company's actual results could
differ significantly from those discussed in the forward-looking statements.
Some of the factors that could cause or contribute to such differences are
discussed herein but also include changes in the economy and interest rates in
the nation and in the Company's general market area.

          Without limiting the foregoing, some of the forward-looking statements
include the following:

          Management's establishment of an allowance for loan losses, and its
statements regarding the adequacy of such allowance for loan losses.

          Management's belief that the allowance for loan losses is adequate.

FINANCIAL CONDITION

          The Company's total assets amounted to $430.0 million as of December
31, 1998, an increase of $68.1 million, or 18.8%, over the $361.9 million total
at December 31, 1997. The increase was funded primarily through growth in
deposits of $64.1 million and an increase in stockholders' equity of $4.1
million, which were partially offset by a decrease in borrowings of $921,000.

          Cash and due from banks, federal funds sold, and investment securities
increased by $11.3 million, or 17.3%, to a total of $76.9 million at December
31, 1998, compared to $65.6 million at December 31, 1997. Investment securities
increased by $5.2 million, as purchases of $45.5 million exceeded maturities of
$35.5 million and sales of $5.0 million. Federal funds sold also increased by
$5.9 million during 1998.

          Loans receivable totaled $340.7 million at December 31, 1998, an
increase of $55.4 million, or 19.4%, over the $285.2 million total at December
31, 1997. Loan disbursements totaled $273.2 million during 1998, which were
partially offset by loan sales of $48.9 million and principal repayments of
$167.3 million. Loan origination volume during 1998 exceeded that of 1997 by
$88.8 million and sales volume increased by $39.7 million. The Company's
allowance for loan losses amounted to $4.3 million at December 31, 1998, an
increase of $572,000, or 15.3%, over the total at December 31, 1997. The
allowance for loan losses represented 1.25% of the total loan portfolio at
December 31, 1998, as compared to 1.30% at December 31, 1997. The Company's
allowance represented 268.9% and 360.4% of nonperforming loans, which totaled
$1.6 million and $1.0 million at December 31, 1998 

                                     - 22 -
<PAGE>   23

and 1997, respectively. The decline in the percentage of the allowance to total
loans at December 31, 1998, generally reflects the fact that one half of the
Company's 1998 loan growth was comprised of residential real estate. This loan
type requires the lowest percentage reserve requirement in the Company's
portfolio due to the negligible loan losses in this category over the last five
years.

          Deposits totaled $366.1 million at December 31, 1998, an increase of
$64.1 million, or 21.2%, over the $302.0 million total at December 31, 1997. The
increase resulted primarily from management's continuing marketing efforts and
competitive pricing with respect to mid-term certificate of deposit products
throughout the Bank's branch network.

          The Company's stockholders' equity amounted to $37.5 million at
December 31, 1998, an increase of $4.1 million, or 12.4%, over the balance at
December 31, 1997. The increase resulted primarily from net earnings of $6.0
million, which were partially offset by dividends to stockholders of $1.3
million and purchases of treasury shares totaling $727,000.

SUMMARY OF EARNINGS

          The table on page 29 shows for each category of interest-earning
assets and interest-bearing liabilities, the average amount outstanding, the
interest earned or paid on such amount, and the average rate earned or paid for
the years ended December 31, 1998, 1997, and 1996. The table also shows the
average rate earned on all interest-earning assets, the average rate paid on all
interest-bearing liabilities, the interest rate spread, and the net interest
margin for the same periods.

          Changes in net interest income are attributed to either changes in
average balances (volume change) or changes in average rates (rate change) for
interest-earning assets and interest-bearing liabilities. Volume change is
calculated as change in volume times the old rate, while rate change is the
change in rate times the old volume. The table on page 26 indicates the dollar
amount of the change attributable to each factor. The rate/volume change, the
change in rate times the change in volume, is allocated between the volume
change and rate change at the ratio each of the components bears to the absolute
value of their total.

COMPARISON OF RESULTS OF OPERATIONS FOR 1998 AND 1997 FISCAL YEARS

          General. Net earnings for the year ended December 31, 1998 totaled
$6.0 million, a $2.3 million, or 62.9% increase over the amount reported in
1997. The increase in earnings resulted primarily from a $2.7 million increase
in net interest income and a $1.2 million increase in other income, which were
partially offset by a $553,000 increase in general, administrative, and other
expenses, an $88,000 increase in the provision for loan losses, and an $866,000
increase in provision for federal income taxes.

          Net Interest Income. Total interest income for the year ended December
31, 1998, amounted to $33.0 million, an increase of $4.7 million, or 16.6%, over
the $28.3 million recorded for 1997. Interest income on loans totaled $28.8
million, an increase of $4.7 million, or 19.5%, over the 1997 period. This
increase resulted primarily from a $59.7 million, or 23.4%, increase in the
average portfolio balance outstanding year-to-year, which was partially offset
by a 30 basis point decrease in the average yield, from 9.46% in 1997 to 9.16%
in 1998. Interest income on investment securities and other interest-earning
assets decreased by $7,000, or 0.2%. The decrease resulted primarily from a 22
basis point decrease in the average yield, from 6.32% in 1997 to 6.10% in 1998,
which was partially offset by a $2.2 million, or 3.5% increase in the average
portfolio balance outstanding year-to-year.

          Total interest expense amounted to $15.7 million for the year ended
December 31, 1998, an increase of $2.0 million, or 14.8%, over the $13.7 million
recorded in 1997. Interest expense on deposits increased by $2.4 million, or
20.2%, to a total of $14.5 million in 1998. The increase resulted primarily from
a $49.2 million, or 19.3%, increase in the average portfolio balance outstanding
year-to-year, combined with a 4 basis point increase in the average cost of
deposits, from 4.73% in 1997 to 4.77% in 1998. Interest expense on borrowings
decreased by $416,000, or 25.9% during 1998. This decrease was due to a $6.9
million decrease in average borrowings

                                     - 23 -
<PAGE>   24
outstanding, which was partially offset by a 7 basis point increase in the
average cost of borrowings, from 6.21% in 1997 to 6.28% in 1998.

          As a result of the foregoing changes in interest income and interest
expense, net interest income increased by $2.7 million, or 18.4%, for the year
ended December 31, 1998, as compared to 1997. The interest rate spread decreased
by 19 basis points from 3.95% in 1997 to 3.76% in 1998, while the net interest
margin decreased by 3 basis points from 4.54% in 1997 to 4.51% in 1998.

          Provision for Loan Losses. The provision for loan losses represents a
charge to earnings to maintain the allowance at a level management believes is
adequate to absorb losses in the loan portfolio. The Company's provision for
loan losses amounted to $1.2 million for the year ended December 31, 1998, an
increase of $88,000, or 7.7%, for the same period in 1997. The provision for
loan losses in 1998 generally reflects the $55.4 million of growth in the loan
portfolio over the year. As stated previously, the majority of the Company's
loan growth in 1998 relates to the residential loan portfolio. Net loan
charge-offs amounted to $666,000 in 1998, as compared to $340,000 in 1997.

          Although management believes that it uses the best information
available in providing for possible loan losses and believes that the allowance
is adequate at December 31, 1998, future adjustments to the allowance could be
necessary and net earnings could be affected if circumstances and/or economic
conditions differ substantially from the assumptions used in making the initial
determinations.

          Other Income. Other income totaled $2.6 million for the year ended
December 31, 1998, an increase of $1.2 million, or 82.4%, over the amount
recorded in 1997. This increase resulted primarily from a $173,000, or 13.2%,
increase in service fees, charges, and other operating income, a $692,000
increase in gain on sale of loans, and a $300,000 gain in sale of assets.

          General, Administrative and Other Expense. General, administrative,
and other expenses totaled $9.6 million for the year ended December 31, 1998, an
increase of $553,000, or 6.1%, over the $9.1 million recorded in 1997. The
increase resulted primarily from a $928,000, or 21.4%, increase in employee
compensation and benefits, a $99,000, or 8.3%, increase in occupancy and
equipment, a $298,000, or 13.5%, increase in other operating expenses, and
increases of $3,000 and $145,000 in Federal deposit insurance premiums and
franchise taxes, respectively, which were partially offset by a $920,000
decrease in merger related expenses.

          The increase in employee compensation and benefits resulted primarily
from increased staffing levels required in connection with the establishment of
new branch locations combined with normal merit increases. Additionally, the
opening of new branch facilities was responsible for the increase in occupancy
and equipment. The increase in other operating expense resulted primarily from
costs attendant to the continued reporting requirements of a public company, as
well as, increases in expenses related to the Company's overall growth
year-to-year.

          Federal Income Taxes. The provision for federal income taxes amounted
to $2.9 million for the year ended December 31, 1998, an increase of $866,000,
or 42.2%, over the $2.1 million recorded in 1997. The increase resulted
primarily from a $3.2 million, or 55.5%, increase in earnings before taxes. The
effective tax rates were 32.6% and 35.6% for December 31, 1998 and 1997,
respectively.

                                     - 24 -
<PAGE>   25
COMPARISON OF RESULTS OF OPERATIONS FOR 1997 AND 1996 FISCAL YEARS

          General. Net earnings for the year ended December 31, 1997 totaled
$3.7 million, a decrease of $4,000, or 0.1%, from the amount reported in 1996.
The decrease in earnings resulted primarily from a $1.4 million increase in
general, administrative, and other expenses, a $291,000 increase in provision
for loan losses, and a $278,000 increase in provision for federal income taxes,
which were partially offset by a $2.0 million increase in net interest income
and a $12,000 increase in other income.

          Net Interest Income. Total interest income for the year ended December
31, 1997, amounted to $28.3 million, an increase of $4.1 million, or 16.9%, over
the $24.2 million recorded for 1996. Interest income on loans totaled $24.1
million, an increase of $3.7 million, or 18.2%, over the 1996 period. This
increase resulted primarily from a $42.3 million, or 19.8%, increase in the
average portfolio balance outstanding year-to-year, which was partially offset
by a 13 basis point decrease in the average yield, from 9.59% in 1996 to 9.46%
in 1997. Interest income on investment securities and other interest-earning
assets increased by $362,000, or 9.7%, to a total of $4.1 million in 1997, as
compared to $3.7 million in 1996. The increase resulted primarily from a $2.8
million increase in the average portfolio balance outstanding year-to-year,
combined with a 29 basis point increase in the average yield from, 6.03% in 1996
to 6.32% in 1997.

          Total interest expense amounted to $13.7 million for the year ended
December 31, 1997, an increase of $2.1 million, or 18.0%, over the $11.6 million
recorded in 1996. Interest expense on deposits increased by $1.5 million, or
14.0%, to a total of $12.1 million in 1997. The increase resulted primarily from
a $32.1 million, or 14.4%, increase in the average portfolio balance outstanding
year-to-year, which was partially offset by a 2 basis point decrease in the
average costs of deposits, from 4.75% in 1996 to 4.73% in 1997. Interest expense
on borrowings increased by $601,000, or 59.9% during 1997. This increase was due
to a $10.8 million increase in average borrowings outstanding, which was
partially offset by a 47 basis point decrease in the average cost of borrowings,
from 6.68% in 1996 to 6.21% in 1997.

          As a result of the foregoing changes in interest income and interest
expense, net interest income increased by $2.0 million, or 15.9%, for the year
ended December 31, 1997, as compared to 1996. The interest rate spread increased
by 4 basis points to 3.95% in 1997 from 3.91% in 1996, while the net interest
margin decreased by 2 basis points to 4.54% in 1997 from 4.56% in 1996.

          Provision For Loan Losses. The provision for loan losses represents a
charge to earnings to maintain the allowance at a level management believes is
adequate to absorb losses in the loan portfolio. The Company's provision for
loan losses amounted to $1.2 million for the year ended December 31, 1997, as
compared to $859,000 for the same period in 1996, an increase of $291,000, or
33.9%. The provision for loan losses in 1997 increased primarily as a result of
the $47.6 million of growth in the loan portfolio over the year. Net loan
charge-offs amounted to $340,000 in 1997, as compared to $292,000 in 1996.

          Although management believes that it uses the best information
available in providing for possible loan losses and believes that the allowance
is adequate at December 31, 1997, future adjustments to the allowance could be
necessary and net earnings could be affected if circumstances and/or economic
conditions differ substantially from the assumptions used in making the initial
determinations.

          Other Income. Other income totaled $1.4 million for the year ended
December 31, 1997, an increase of $12,000, or 0.9%, over the amount recorded in
1996. This increase resulted primarily from a $19,000, or 1.5%, increase in
service fees, charges, and other operating income, coupled with a $78,000
increase in gain on sale of loans, which were partially offset by net losses on
sale of investments and other assets of $60,000, as compared to a $25,000 net
gain recorded on such sales during the 1996 period.

          General, Administrative and Other Expense. General, administrative,
and other expenses totaled $9.1 million for the year ended December 31, 1997, an
increase of $1.4 million, or 19.0%, over the $7.6 million recorded in 1996. The
increase resulted primarily from expenses of $920,000 incurred in connection
with the previously described Unity merger, combined with a $364,000, or 9.2%,
increase in employee compensation and benefits, a

                                     - 25 -
<PAGE>   26
$153,000, or 14.8%, increase in occupancy and equipment, and a $394,000, or
21.7%, increase in other operating expenses, which were partially offset by a
$337,000, or 85.3%, reduction in Federal deposit insurance premiums from
year-to-year.

          The increase in employee compensation and benefits resulted primarily
from increased staffing levels required in connection with the establishment of
new branch locations in 1997 and late 1996 combined with normal merit increases.
Additionally, the opening of new branch facilities was responsible for the
increase in occupancy and equipment expense. The decline in Federal deposit
insurance premiums was due to the absence in 1997 of the one-time SAIF
recapitalization assessment that was paid by Unity in 1996 with respect to its
operations as a thrift institution. The increase in other operating expense
resulted primarily from costs attendant to the continued reporting requirements
of a public company, as well as increases in expenses related to the Company's
growth year-to-year.

          Federal Income Taxes. The provision for federal income taxes amounted
to $2.1 million for the year ended December 31, 1997, an increase of $278,000,
or 15.7%, over the $1.8 million recorded in 1996. The increase resulted
primarily from the nondeductible merger expenses that were incurred in 1997 as
compared to 1996. The effective tax rates were 35.6% and 32.3% for December 31,
1997 and 1996, respectively.

LIQUIDITY AND CAPITAL RESOURCES

          Like other financial institutions, the Company must ensure that
sufficient funds are available to meet deposit withdrawals, loan commitments,
and expenses. Control of the Company's cash flow requires the anticipation of
deposit flows and loan payments. The Company's primary sources of funds are
deposits and principal and interest payments on loans. The Company uses funds
from deposit inflows and principal and interest payments on loans primarily to
originate loans, and to purchase short-term investment securities and
interest-bearing deposits.

          At December 31, 1998, the Company had $157.9 million of certificates
of deposit maturing within one year. It has been the Company's historic
experience that such certificates of deposit will be renewed at market rates of
interest. It is management's belief that maturing certificates of deposit over
the next year will similarly be renewed at market rates of interest without a
material adverse effect on results of operations.

          In the event that certificates of deposit cannot be renewed at
prevalent market rates, the Company can obtain up to $40.0 million in advances
from the Federal Home Loan Bank of Cincinnati (FHLB). Also, as an operational
philosophy, the Company seeks to obtain advances to help with asset/liability
management and liquidity. At December 31, 1998, the Company had $23.8 million of
outstanding FHLB advances.

          As of December 31, 1998, loan commitments, or loans committed but not
closed, totaled $6.9 million. Additionally, the Bank had unused lines of credit
and letters of credit totaling $40.9 and $523,000, respectively. Funding for
these amounts is expected to be provided by the sources described above.
Management believes the Company has adequate resources to meet its normal
funding requirements.

EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS

          In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers
of Financial Assets, Servicing Rights, and Extinguishment of Liabilities," that
provides accounting guidance on transfers of financial assets, servicing of
financial assets, and extinguishment of liabilities. SFAS No. 125 introduces an
approach to accounting for transfers of financial assets that provides a means
of dealing with more complex transactions in which the seller disposes of only a
partial interest in the assets, retains rights or obligations, makes use of
special purpose entities in the transaction, or otherwise has continuing
involvement with the transferred assets. The new accounting method, referred to
as the financial components approach, provides that the carrying amount of the
financial assets transferred be allocated to components of the transaction based
on their relative fair values. SFAS No. 125 provides

                                     - 26 -
<PAGE>   27
criteria for determining whether control of assets has been relinquished and
whether a sale has occurred. If the transfer does not qualify as a sale, it is
accounted for as a secured borrowing. Transactions subject to the provisions of
SFAS No. 125 include among others, transfers involving repurchase agreements,
securitizations of financial assets, loan participations, factoring arrangements
and transfers of receivables with recourse.

          An entity that undertakes an obligation to service financial assets
recognizes either a servicing asset or liability for the servicing contract
(unless related to a securitization of assets, and all the securitized assets
are retained and classified as held-to-maturity). A servicing asset or liability
that is purchased or assumed is initially recognized at its fair value.
Servicing assets and liabilities are amortized in proportion to and over the
period of estimated net servicing income or net servicing loss and are subject
to subsequent assessments for impairment based on fair value.

          SFAS No. 125 provides that a liability is removed from the balance
sheet only if the debtor either pays the creditor and is relieved of its
obligation for the liability or is legally released from being the primary
obligor.

          SFAS No.125 is effective for transfers and servicing of financial
assets and extinguishment of liabilities occurring after December 31, 1997, and
is to be applied prospectively. Earlier or retroactive application is not
permitted. Management adopted SFAS No. 125 effective January 1, 1998, as
required, without material effect on the Company's consolidated financial
position or results of operations.

          In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of general-purpose financial statements. SFAS No. 130 requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. It does not
require a specific format for that financial statement but requires that an
enterprise display an amount representing total comprehensive income for the
period in that financial statement.

          SFAS No. 130 requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and (b) display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position. SFAS No. 130 is effective for fiscal years beginning after
December 15, 1997. Reclassification of financial statements for earlier periods
provided for comparative purposes in required. SFAS No. 130 is not expected to
have a material impact on the Company's financial statements.

          In June 1997, the FASB issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131 significantly
changes the way that public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about reportable segments in interim
financial reports issued to shareholders. It also establishes standards for
related disclosures about products and services, geographic areas and major
customers. SFAS No. 131 uses a "management approach" to disclose financial and
descriptive information about the way that management organizes the segments
within the enterprise for making operating decisions and assessing performance.
For many enterprises, the management approach will likely result in more
segments being reported. In addition, SFAS No. 131 requires significantly more
information to be disclosed for each reportable segment than is presently being
reported in annual financial statements and also requires that selected
information be reported in interim financial statements. SFAS No. 131 is
effective for fiscal years beginning after December 15, 1997. SFAS No. 131 is
not expected to have a material impact on the Company's financial statements.

          In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which requires entities to recognize all
derivatives in their financial statements as either assets or liabilities
measured at fair value. SFAS No. 133 also specifies new methods of accounting
for hedging activities,

                                     - 27 -
<PAGE>   28
prescribes the items and transactions that may be hedged, and specifies detailed
criteria to be met to qualify for hedging accounting.

          The definition of a derivative financial instrument is complex, but in
general, it is an instrument with one or more underlyings, such as an interest
rate or foreign exchange rate, that is applied to a notional amount, such as an
amount of currency, to determine the settlement amount(s). It generally requires
no significant initial investment and can be settled net or by delivery of an
asset that is readily convertible to cash. SFAS No. 133 applies to derivatives
embedded in other contracts, unless the underlying of the embedded derivative is
clearly and closely related to the host contract. SFAS No. 133 is effective for
fiscal years beginning after June 15, 1999. On adoption, entities are permitted
to transfer held-to-maturity debt securities to an available-for-sale or trading
category without calling into question their intent to hold other debt
securities to maturity in the future. SFAS No. 133 is not expected to have a
material impact on the Company's financial statements.

IMPACT OF INFLATION AND CHANGING PRICES

          The consolidated financial statements and related data herein have
been prepared in accordance with generally accepted accounting principles, which
require measurement of financial condition and results of operations in terms of
historical dollars, without considering changes in the relative purchasing power
of money over time due to inflation.

          Since the primary assets and liabilities of the Company are monetary
in nature, changes in the general level of prices for goods and services have a
relatively minor impact on the Company's total expenses. Increases in operating
expenses such as salaries and maintenance are in part attributable to inflation.
However, interest rates have a far more significant effect than inflation on the
performance of financial institutions, including the Company.

OTHER MATTERS/YEAR 2000 ISSUES

          As with all providers of financial services, the Company's operations
are heavily dependent on information technology systems. The Bank and Action are
addressing the potential problems associated with the possibility that the
computers that control or operate their information technology system and
infrastructure may not be programmed to read four-digit dates codes and upon
arrival of the year 2000, may recognize the two-digit code "00" as the year
1900, causing systems to fail to function or to generate erroneous data. The
Bank and Action are working with the companies that supply or service its
information technology systems to identify and remedy any year 2000 related
problems.

          In 1997, the Company developed a three phase program within the
guidelines of the Federal Financial Institutions Examination Council (the
"FFIEC"). Phase I Awareness and Assessment was to define the problem, to
establish a committee to oversee the project, to develop an overall strategy, to
identify all aspects that could be affected by the year 2000, to recognize
vendor responsibilities, and to formulate contingency plans. Phase II Renovation
is to upgrade and replace equipment as necessary. Phase I and Phase II were
largely completed by December 31, 1998. During the phases, the following systems
were considered to be mission critical: Peerless 21 software, ISBO Link, and
Fedline. Peerless 21 is the Bank's main processing system, while the ISBO Link
is the Bank's connection with the Independent State Bank of Ohio. The ISBO link
processes wires, credit card applications, and fed funds. Fedline is the Bank's
connection with the Federal Reserve Bank. Wires, automated clearing house (ACH),
treasury tax and loan, and payer services are mission critical applications
processed on the Fedline. The Company is in the process of upgrading these
systems as necessary. However, should any of these mission critical systems fail
to be year 2000 ready, contingency plans to warehouse transactions, to
correspond with ISBO and the Federal Reserve via telephone and fax, and to
manually process payer services and ACH are in place and to be used until such
time that the year 2000 errors can be corrected. Phase III Validation began
during the fourth quarter of 1998 and is scheduled to be completed by early
1999. In this phase, systems and equipment will be tested to ensure year 2000
readiness.

                                     - 28 -
<PAGE>   29
          The Company believes that to ensure year 2000 readiness, approximately
$120,000 in costs will be incurred. Approximately 25% of the costs were incurred
during 1998, while the remaining amount is expected to be incurred during 1999.
Although the Company believes that this estimate is reasonable at this time, if
the Bank and/or Action is ultimately required to purchase replacement computer
systems, programs and/or equipment, or incur substantial expense to make their
systems, programs, and/or equipment year 2000 ready, the Company's net earnings
and financial condition could be adversely affected.

          In addition to possible expense related to its own systems, the Bank
and/or Action could incur losses if loan payments are delayed due to year 2000
problems affecting any major borrowers in their primary market areas. Because
their loan portfolios are highly diversified with regard to individual borrowers
and types of businesses, and their primary market areas are not significantly
dependent upon any one employer or industry, they do not expect any significant
or prolonged difficulties that will affect net earnings or cash flow.

<TABLE>
<CAPTION>
                                                                   AVERAGE BALANCES AND INTEREST RATES
                                                                         YEAR ENDED DECEMBER 31,

                                                 1998                             1997                             1996
                                     -----------------------------    -----------------------------    -----------------------------
                                                INTEREST                         INTEREST                         INTEREST
                                     AVERAGE     INCOME/   AVERAGE    AVERAGE     INCOME/   AVERAGE    AVERAGE     INCOME/   AVERAGE
                                     BALANCE     EXPENSE     RATE     BALANCE     EXPENSE     RATE     BALANCE     EXPENSE     RATE
                                     -------     -------   -------    -------     -------   -------    -------     -------   -------
                                                                          (DOLLARS IN THOUSANDS)
<S>                                  <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Interest-earning assets:
Loans receivable:
   Real estate mortgage              $113,494    $ 9,434     8.31%    $102,882    $ 9,038     8.78%    $ 91,249    $ 8,243     9.03%
   Commercial and other               146,505     13,688     9.34      108,125     10,499     9.71       84,840      8,157     9.61
   Installment loans                   53,701      5,566    10.37       43,159      4,465    10.35       36,012      3,882    10.78
   Credit card                          1,273        161    12.65        1,128        141    12.50          930        138    14.84
Investment securities                  58,058      3,617     6.23       56,682      3,666     6.47       50,862      3,180     6.25
Federal funds sold                      9,079        478     5.27        7,998        428     5.35        7,950        428     5.38
Interest-earning deposits                 125          9     7.20          334         17     5.09        3,368        141     4.19
                                     --------    -------   ------     --------    -------   ------     --------    -------   ------

    Total interest-earning assets     382,235     32,953     8.62      320,308     28,254     8.82      275,211     24,169     8.78
Non-interest-earning assets            12,388                           19,064                           13,129
                                     --------                         --------                         --------

        Total assets                 $394,623                         $339,372                         $288,340
                                     ========                         ========                         ========

Interest-bearing liabilities:
Deposits:
   Savings accounts                  $ 41,218      1,234     2.99     $ 40,863      1,271     3.11    $  41,195      1,381     3.35
   NOW accounts                        25,738        515     2.00       25,110        529     2.11       25,622        492     1.92
   Money market deposits                6,433        198     3.08        6,582        196     2.98        4,267        134     3.14
   Premium investment  accounts        35,285      1,618     4.59       26,390      1,275     4.83       23,034      1,131     4.91
   Certificates of deposit            196,110     10,978     5.60      156,870      8,832     5.63      129,574      7,478     5.77
Borrowings                             18,904      1,188     6.28       25,820      1,604     6.21       15,006      1,003     6.68
                                     --------    -------   ------     --------    -------   ------     --------    -------   ------

Total interest-bearing liabilities    323,688     15,731     4.86      281,635     13,707     4.87      238,698     11,619     4.87
                                     --------    -------   ------     --------    -------   ------     --------    -------   ------

Non-interest-bearing liabilities       35,214                           26,030                           20,811

Stockholders' equity                   35,721                           31,707                           28,831
                                     --------                         --------                         --------
        Total liabilities and
        stockholders' equity         $394,623                         $339,372                         $288,340
                                     ========                         ========                         ========

Net interest income and interest
rate spread                                      $17,222     3.76%                $14,547     3.95%                $12,550     3.91%
                                                 =======   ======                 =======   ======                 =======   ======


Net interest margin(1)                                       4.51%                            4.54%                            4.56%
                                                           ======                           ======                           ======

Average interest-earning assets to
average interest-bearing liabilities                       118.09%                          113.73%                          115.30%
                                                           ======                           ======                           ======
</TABLE>

(1)       The net interest margin is the net interest income divided by average
          interest-earning assets.

                                     - 29 -
<PAGE>   30
<TABLE>
<CAPTION>
                                                        1998 vs 1997                       1997 vs 1996
                                                        ------------                       ------------
                                                 INCREASE (DECREASE) DUE TO         INCREASE (DECREASE) DUE TO
                                                VOLUME       RATE      TOTAL       VOLUME       RATE      TOTAL
<S>                                             <C>         <C>        <C>         <C>         <C>        <C>   
Change in interest income attributable to:
   Loans receivable                             $5,416      $(710)     $4,706      $3,947      $(224)     $3,723
   Investment securities                            84       (133)        (49)        374        112         486
   Federal funds sold                               57         (7)         50           3         (3)         --
   Interest earning deposits with banks            (41)        33          (8)       (180)        56        (124)
                                                ------      -----      ------      ------      -----      ------
            Total interest income               $5,516      $(817)     $4,699      $4,144      $ (59)     $4,085
                                                ======      =====      ======      ======      =====      ======


Change in interest expense attributable to:
   Deposits                                     $2,332      $ 108      $2,440      $1,515      $ (28)     $1,487
   Borrowings                                     (437)        21        (416)        670        (69)        601
                                                ------      -----      ------      ------      -----      ------
            Total interest expense              $1,895      $ 129      $2,024      $2,185      $ (97)     $2,088
                                                ======      =====      ======      ======      =====      ======


Increase in net interest income                                        $2,675                             $1,997
                                                                       ======                             ======
</TABLE>

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

          None.

ITEM 8.   FINANCIAL STATEMENTS

          Consolidated Financial Statements of the Company, together with the
reports thereon of Grant Thornton LLP (dated February 3, 1999) are set forth on
pages F-1 hereof (see Item 14 of this Annual Report for Index).

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE.

          Not Applicable.

                                    PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

          The information contained under "Ownership of Common Stock by
Principal Shareholders" and "Ownership of Common Stock by Management" in the
Company's Definitive Proxy Statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A of the Exchange Act within 120
days after the end of the fiscal year covered by this Form 10-K is incorporated
herein by reference in response to this item.

          The information contained under "Compliance With Section 16(a) of the
Securities Exchange Act" in the Company's Definitive Proxy Statement to be filed
with the Securities and Exchange Commission pursuant to Regulation 14A of the
Exchange Act within 120 days after the end of the fiscal year covered by this
Form 10-K is incorporated herein by reference in response to this item.

ITEM 11.  EXECUTIVE COMPENSATION.

          The information appearing under "Executive Compensation" in the
Company's Definitive Proxy Statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A of the Exchange Act within 120
days after the end of the fiscal year covered by this Form 10-K is incorporated
herein by reference in response to this item.

                                     - 30 -
<PAGE>   31
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

          The information appearing under "Ownership of Common Stock by
Principal Shareholders" and "Ownership of Common Stock By Management" in the
Company's Definitive Proxy Statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A of the Exchange Act within 120
days after the end of the fiscal year covered by this Form 10-K is incorporated
herein by reference in response to this item.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

          The information appearing under "Certain Transactions" in the
Company's Definitive Proxy Statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A of the Exchange Act within 120
days after the end of the fiscal year covered by this Form 10-K is incorporated
herein by reference in response to this item.


                                     PART IV

ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)       Documents filed as a part of the Report:

          (1)  Report of Grant Thornton LLP, Independent Auditors

               Consolidated Statements of Financial Condition as of December 31,
                 1998 and 1997

               Consolidated Statements of Earnings for years ended December 31,
                 1998, 1997 and 1996

               Consolidated Statements of Comprehensive Income for years ended
                 December 31, 1998, 1997 and 1996

               Consolidated Statements of Stockholder's Equity for years ended
                 December 31, 1998, 1997 and 1996

               Consolidated Statements of Cash Flows for years ended December
                 31, 1998, 1997 and 1996

               Notes to Consolidated Financial Statements for years ended
                 December 31, 1998, 1997 and 1996


          (2)  Financial Statement Schedules:

               The information is contained in the Company's Annual Report to
               Stockholders for the year ended December 31, 1998 is incorporated
               herein by reference in response to this item.

          (3)  The following are filed as exhibits to this Annual Report on Form
               10-K:

          Exhibit
          Number
          ------

          * 3(a).....................Second Amended and Restated Articles of
                                     Incorporation (reference is made to Form
                                     SB-2, Exhibit 3(i), File No. 33-096216 and
                                     incorporated herein by reference).

          * 3(b).....................Restated Code of Regulations (reference is
                                     made to Form SB-2, Exhibit 3(ii), File No.
                                     33-96216 and incorporated herein by
                                     reference).

                                     - 31 -
<PAGE>   32
          * 4(a).....................Reference is made to Articles FOURTH,
                                     FIFTH, SEVENTH, EIGHTH, TENTH AND ELEVENTH
                                     of the Registrant's Restated Articles of
                                     Incorporation (contained in the
                                     Registrant's Restated Articles of
                                     Incorporation filed as Exhibit 3(a) hereto)
                                     and Articles II, III, IV, VI and VIII of
                                     the Registrant's Amended and Restated Code
                                     of Regulations (contained in the
                                     Registrant's Amended and Restated Code of
                                     Regulations filed as Exhibit 3(b) hereto).

          * 4(b).....................Rights Plan, dated January 23, 1998,
                                     between Oak Hill Financial, Inc., and Fifth
                                     Third Bank, (reference is made to Exhibit
                                     4.1 to the Form 8-A, filed with the
                                     Securities and Exchange Commission on
                                     January 23, 1998 and incorporated herein by
                                     reference).

          *10(a).....................Oak Hill Financial, Inc. Amended and
                                     Restated 1995 Stock Option Plan (reference
                                     is made to Form SB-2, Exhibit 10(a), File
                                     No. 33-96216 and incorporated herein by
                                     reference).

          *10(b).....................Employment Agreement between D. Bruce Knox
                                     and the Registrant, dated April 28, 1997,
                                     (reference is made to Form S-4, Exhibit
                                     10(b), file No. 333-30349, and incorporated
                                     herein by reference).

          *10(c).....................Executive Salary Continuation Agreement
                                     between D. Bruce Knox and Unity Savings
                                     Bank, dated December 7, 1994, (reference is
                                     made to Form S-4, Exhibit 10(c), file No.
                                     333-30349, and incorporated herein by
                                     reference).

          *10(d).....................Executive Salary Continuation Agreement
                                     between George Knox and Unity Savings Bank,
                                     dated December 7, 1994, (reference is made
                                     to Form S-4, Exhibit 10(d), file No.
                                     333-30349, and incorporated herein by
                                     reference).

          *10(e).....................Amendment, dated September 18, 1995 to the
                                     Executive Salary Continuation Agreement
                                     between George Knox and Unity Savings Bank,
                                     (reference is made to Form S-4, Exhibit
                                     10(e), file No. 333-30349, and incorporated
                                     herein by reference).

           13........................Annual Report (Selected Portions).

          *21........................Subsidiaries of the Registrant (reference
                                     is made to Form SB-2, Exhibit 21, File No.
                                     33-96216 and incorporated herein by
                                     reference).

           23........................Consent of Grant Thornton LLP.

           24........................Powers of Attorney.

           27........................Financial Data Schedule.

*Incorporated by reference as indicated.

(b)       Form 8-K's Filed in the Fourth Quarter

          1.        Form 8-K, dated October 20, 1998, filed with the Securities
                    and Exchange Commission on October 21, 1998.

                                     - 32 -
<PAGE>   33
                                   SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.

                                       OAK HILL FINANCIAL, INC.

                                       By:     /s/ John D. Kidd
                                           -------------------------------
                                              John D. Kidd, President
                                              and Chief Executive Officer

          Pursuant to the requirements of the Securities Exchange Act of 1934,
the report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

         SIGNATURE                          TITLE                     DATE
         ---------                          -----                     ----

*  Evan E. Davis                Chairman of the Board          )  March 29, 1999
----------------------------                                   )
 Evan E. Davis                                                 )
                                                               )
                                                               )
/s/ John D. Kidd                President, Chief Executive     )  March 29, 1999
----------------------------    Officer, and Director          )
 John D. Kidd                   (Principal Executive Officer)  )
                                                               )
                                                               )
*  Richard P. LeGrand           Executive Vice President       )  March 29, 1999
----------------------------    and Director                   )
 Richard P. LeGrand                                            )
                                                               )
                                                               )
*  H. Tim Bichsel               Secretary and Treasurer        )  March 29, 1999
----------------------------    (Principal Financial and       )
 H. Tim Bichsel                 Accounting Officer)            )
                                                               )
                                                               )
*  Barry M. Dorsey              Director                       )  March 29, 1999
----------------------------                                   )
 Barry M. Dorsey                                               )
                                                               )
*  C. Clayton Johnson           Director                       )  March 29, 1999
----------------------------                                   )
 C. Clayton Johnson                                            )
                                                               )
                                                               )
*  Rick A. McNelly              Director                       )  March 29, 1999
----------------------------                                   )
 Rick A. McNelly                                               )
                                                               )
                                                               )
*  Donald R. Seigneur           Director                       )  March 29, 1999
----------------------------                                   )
 Donald R. Seigneur                                            )
                                                               )
                                                               )
/s/ H. Grant Stephenson         Director                       )  March 29, 1999
----------------------------                                   )
    H. Grant Stephenson                                        )

                                     - 33 -
<PAGE>   34
         SIGNATURE                          TITLE                     DATE
         ---------                          -----                     ----
* D. Bruce Knox                            Director            )  March 29, 1999
----------------------------                                   )
    D. Bruce Knox                                              )
                                                               )
                                                               )
By: /s/ H. Grant Stephenson                                    )  March 29, 1999
   -----------------------------------                         )
 H. Grant Stephenson, attorney-in-fact                         )
 for each of the persons indicated                             )

                                     - 34 -
<PAGE>   35
                            OAK HILL FINANCIAL, INC.

                                  FORM 10-K FOR
                                  THE YEAR END
                                DECEMBER 31, 1998
                                  EXHIBIT INDEX

                                     - 35 -
<PAGE>   36
                                    EXHIBIT
          Number
          ------

          * 3(a).....................Second Amended and Restated Articles of
                                     Incorporation (reference is made to Form
                                     SB-2, Exhibit 3(i), File No. 33-096216 and
                                     incorporated herein by reference).

          * 3(b).....................Restated Code of Regulations (reference is
                                     made to Form SB-2, Exhibit 3(ii), File No.
                                     33-96216 and incorporated herein by
                                     reference).

          * 4(a).....................Reference is made to Articles FOURTH,
                                     FIFTH, SEVENTH, EIGHTH, TENTH AND ELEVENTH
                                     of the Registrant's Restated Articles of
                                     Incorporation (contained in the
                                     Registrant's Restated Articles of
                                     Incorporation filed as Exhibit 3(a) hereto)
                                     and Articles II, III, IV, VI and VIII of
                                     the Registrant's Amended and Restated Code
                                     of Regulations (contained in the
                                     Registrant's Amended and Restated Code of
                                     Regulations filed as Exhibit 3(b) hereto).

          * 4(b).....................Rights Plan, dated January 23, 1998,
                                     between Oak Hill Financial, Inc., and Fifth
                                     Third Bank, (reference is made to Exhibit
                                     4.1 to the Form 8-A, filed with the
                                     Securities and Exchange Commission on
                                     January 23, 1998 and incorporated herein by
                                     reference).

          *10(a).....................Oak Hill Financial, Inc. Amended and
                                     Restated 1995 Stock Option Plan (reference
                                     is made to Form SB-2, Exhibit 10(a), File
                                     No. 33-96216 and incorporated herein by
                                     reference).

          *10(b).....................Employment Agreement between D. Bruce Knox
                                     and the Registrant, dated April 28, 1997,
                                     (reference is made to Form S-4, Exhibit
                                     10(b), file No. 333-30349, and incorporated
                                     herein by reference).

          *10(c).....................Executive Salary Continuation Agreement
                                     between D. Bruce Knox and Unity Savings
                                     Bank, dated December 7, 1994, (reference is
                                     made to Form S-4, Exhibit 10(c), file No.
                                     333-30349, and incorporated herein by
                                     reference).

          *10(d).....................Executive Salary Continuation Agreement
                                     between George Knox and Unity Savings Bank,
                                     dated December 7, 1994, (reference is made
                                     to Form S-4, Exhibit 10(d), file No.
                                     333-30349, and incorporated herein by
                                     reference).

          *10(e).....................Amendment, dated September 18, 1995 to the
                                     Executive Salary Continuation Agreement
                                     between George Knox and Unity Savings Bank,
                                     (reference is made to Form S-4, Exhibit
                                     10(e), file No. 333-30349, and incorporated
                                     herein by reference).

           13........................Annual Report (Selected Portions).

          *21........................Subsidiaries of the Registrant (reference
                                     is made to Form SB-2, Exhibit 21, File No.
                                     33-96216 and incorporated herein by
                                     reference).

           23........................Consent of Grant Thornton LLP.

           24........................Powers of Attorney.

           27........................Financial Data Schedule.

*Incorporated by reference as indicated.

                                     - 36 -